Amended Law Expands Franchisor Liability for Conduct of Subsidiaries and Franchisees

New Legislation Enacted

Author: Alexandra Klimovics, Attorney — Littler Mendelson, P.C.

On October 27, 2017, amendments to the Fair Work Act became law, establishing that certain franchisors and holding companies can be held responsible if their franchisees or subsidiaries failed to comply with workplace laws (if they knew or should have known and could have prevented it). Also, new and increased penalties for serious contraventions of workplace laws (including violations related to record-keeping and pay slips, and providing false or misleading information or hindering investigation) took effect on September 15, 2017.

Post-Employment Restraints Not Enforceable if Employer Repudiates Contract

Precedential Decision by Judiciary or Regulatory Agency

Author: Alexandra Klimovics, Attorney — Littler Mendelson, P.C.

The Victorian Court of Appeal recently found that restraint of trade provisions in employment contracts are unenforceable if the employer repudiates the contract. In that case, the employer breached its contract with a senior accountant when it made changes to his bonus payment scheme and role within the firm, which prompted the employee to end the contract. The Court awarded substantial damages to the employee and confirmed that post-employment restraints are rarely, if ever, enforceable where employment ends as a result of the employer's repudiation of the employment contract.

High Court to Determine Duty of Care Owed During Workplace Investigations

Precedential Decision by Judiciary or Regulatory Agency

Author: Alexandra Klimovics, Attorney — Littler Mendelson, P.C.

The High Court will soon consider the existence and scope (if any) of an employer’s duty of care owed when conducting workplace investigations. This is a significant development, as case law currently rejects the notion that an employer is obligated to provide a safe system of investigation and disciplinary decision-making in the workplace. The Court likely will consider whether an employee’s physical or mental health condition should affect the investigation approach and whether written communications may be reasonable, in lieu of face-to-face or telephone discussions during the investigation.

Victorian Government Bill Seeks to Amend Long Service Leave Act

Proposed Bill or Initiative

Author: Alexandra Klimovics, Attorney — Littler Mendelson, P.C.

The Long Service Leave Bill 2017 (Vic) seeks, in part, to: (1) allow employees to take long service leave (LSL) after 7 years of continuous employment with the one employer (currently this arises after 10 years); (2) allow eligible employees to agree with their employer to take LSL one day at a time, providing for greater flexibility (currently LSL leave is limited to a maximum of up to three large blocks); (3) clarify the effect of parental leave on LSL accrual; and (4) ensure that unpaid leave greater than 12 months will not break the employee’s continuous service for the purpose of accruals.

Protection for Australian Whistleblowers Set to Increase

Proposed Bill or Initiative

Author: Alexandra Klimovics, Attorney — Littler Mendelson, P.C.

A Parliamentary Joint Committee recently recommended various changes to Australian whistleblower protections, including: (1) establishment of the “Whistleblower Protection Authority” to investigate reprisals against whistleblowers and award wage-based compensation to a whistleblower; (2) introduction of (capped) financial rewards for whistleblowers, whose information results in the imposition of a penalty against a wrongdoer; and (3) increased protections for private sector whistleblowers, including for anonymous disclosures. Australian businesses should review their existing whistleblowing policies and procedures prior to June 2018, the proposed change implementation date.